Mulberry rush to extend brand overseas

LUXURY fashion brand Mulberry said it expects overseas sales to overtake those in its home market in two years, as it beat forecasts with a more than fourfold increase in profit.

The firm, which is best known for its leather handbags priced around £500-£900, outlined its potential for expansion, particularly in China and the United States.

Godfrey Davis, chairman and chief executive, said: “Probably in the year after next the sales to the rest of the world will exceed the UK and that trend will continue.

Hide Ad
Hide Ad

“We have two shops in New York so there’s quite a lot of the United States to go at, we’ve got one shop in Beijing so there’s quite a lot of China to go at.”

Mulberry, which designs, manufactures and sells leather goods and accessories, trades from 44 owned stores and department store concessions in the UK and 42 owned or franchised stores overseas.

Mr Davis expects at least 12 overseas openings in the next year, with new stores in the US South Korea, China, Germany, Switzerland and Austria.

“We believe that this could be just the beginning of the Mulberry story given the limited footprint held in many of the largest luxury goods markets outside the UK,” said John Cummins, analyst at house broker Altium Securities.

Hide Ad
Hide Ad

The firm has a greater market capitalisation than the combined total of struggling British high street retailers Dixons, HMV and Game.

The global luxury goods market has continued last year’s strong recovery, defying fears it might be hit by austerity measures in Europe and steps to cool fast-growing emerging market economies. Last month Burberry posted a 39 per cent rise in profit.

Mulberry made a pre-tax profit of £23.3m in the year to March 31 while revenue jumped 69 per cent to £121.6m, with international sales up 145 per cent to £40.5m.

Both retail and wholesale sales were up 38 per cent in the 10 weeks to June 4. Mulberry, which ended the year with cash of £21.4m, is paying a dividend of 4 pence, up 82 per cent.